How could a private equity firm boost its return in an LBO?

1. Lower the Purchase Price in the model.

2. Raise the Exit Multiple / Exit Price.

3. Increase the Leverage (debt) used.

4. Increase the company’s growth rate (organically or via acquisitions). 5. Increase margins by reducing expenses (cutting employees, consolidating buildings, etc.).

Note that these are all “theoretical” and refer to the model rather than reality – in practice, it’s hard to actually implement these.